CHICAGO — Unwilling to accept a proposed income tax increase for the state’s top earners, Minnesota Gov. Tim Pawlenty moved quickly Tuesday to veto the budget-balancing plan rushed through the Legislature one day earlier by Democratic leaders.
The legislation would have dealt with a nearly $3 billion budget shortfall in the $57 billion, two-year budget through cuts and by raising more than $400 million by establishing a new income tax bracket. The state Democratic-Farmer-Labor Party that controls the Legislature had hoped to sway the Republican governor to support the tax hike and avert deeper cuts to education and human services by enacting most of the $2.5 billion in spending reductions he had made to the budget last year.
Without action, those cuts could be challenged following a state Supreme Court decision ruling last week that found the governor overstepped his unallotment authority in cutting the budget sent to him by the Legislature. Prior to the ruling, the state was facing a roughly $500 million shortfall.
Pawlenty did not immediately release a veto letter. Democrats issued a statement but did not say whether they planned to attempt an override. “Ultimately, he has to work with us, Minnesota’s elected representatives, to balance the budget,” House Speaker Margaret Anderson Kelliher said in the statement.
The veto sets the stage for contentious negotiations. Democrats are unwilling to cut more and Pawlenty opposes tax increases. The Legislature is scheduled to adjourn by May 17, but Pawlenty could call a special session. The Democrats’ plan would have established a new tax rate of 9.15 %, up from 7.85% for married couples with taxable income of more than $200,000 and individual filers with taxable income of more than $113,000.